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Developing countries in need: Which characteristics appeal most to people when donating money?

Author

Listed:
  • Paul Hansen

    () (Department of Economics, University of Otago, New Zealand)

  • Nicole Kergozou

    () (Reserve Bank of New Zealand)

  • Stephen Knowles

    () (Department of Economics, University of Otago, New Zealand)

  • Paul Thorsnes

    () (Department of Economics, University of Otago, New Zealand)

Abstract

A discrete choice experiment was conducted to discover the relative importance of five characteristics of developing countries, as suggested by the literature, considered by people when choosing countries to donate money to. The experiment was administered via an online survey involving almost 700 student participants (potential donors) from a New Zealand university. The most important recipient-country characteristic for participants on average is hunger and malnutrition (a weight of 0.29), followed by child mortality (0.24), quality of infrastructure (0.21), income per capita (0.18), and, least importantly, ties to New Zealand (0.09). A cluster analysis of participants' individual `part-worth utilities' representing the relative importance of the country characteristics reveals they are not strongly correlated with participants' demographic characteristics. Our findings overall indicate that to maximise the donations they receive, non-governmental aid organisations are better to focus their marketing efforts on emphasising country characteristics associated with hunger, malnutrition and child mortality than other things.

Suggested Citation

  • Paul Hansen & Nicole Kergozou & Stephen Knowles & Paul Thorsnes, 2013. "Developing countries in need: Which characteristics appeal most to people when donating money?," Working Papers 1312, University of Otago, Department of Economics, revised Sep 2013.
  • Handle: RePEc:otg:wpaper:1312
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    File URL: http://www.otago.ac.nz/economics/research/otago076647.pdf
    File Function: First version, 2013
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    References listed on IDEAS

    as
    1. Alesina, Alberto & Dollar, David, 2000. "Who Gives Foreign Aid to Whom and Why?," Journal of Economic Growth, Springer, vol. 5(1), pages 33-63, March.
    2. Nunnenkamp, Peter & Weingarth, Janina & Weisser, Johannes, 2009. "Is NGO aid not so different after all? Comparing the allocation of Swiss aid by private and official donors," European Journal of Political Economy, Elsevier, vol. 25(4), pages 422-438, December.
    3. Christie Smith, 2009. "Revealing monetary policy preferences," Reserve Bank of New Zealand Discussion Paper Series DP2009/01, Reserve Bank of New Zealand.
    4. Etang, Alvin & Fielding, David & Knowles, Stephen, 2012. "Giving to Africa and perceptions of poverty," Journal of Economic Psychology, Elsevier, vol. 33(4), pages 819-832.
    5. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September.
    6. Branas-Garza, Pablo, 2006. "Poverty in dictator games: Awakening solidarity," Journal of Economic Behavior & Organization, Elsevier, vol. 60(3), pages 306-320, July.
    7. Frode Alfnes & Maren Bachke & Mette Wik, 2012. "Eliciting donor preferences," Artefactual Field Experiments 00098, The Field Experiments Website.
    8. Trumbull, William N & Wall, Howard J, 1994. "Estimating Aid-Allocation Criteria with Panel Data," Economic Journal, Royal Economic Society, vol. 104(425), pages 876-882, July.
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    Cited by:

    1. Bachke, Maren Elise & Alfnes, Frode & Wik, Mette, 2017. "Information and donations to development aid projects," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 66(C), pages 23-28.
    2. Madsen, Jakob B., 2016. "Barriers to Prosperity: Parasitic and Infectious Diseases, IQ, and Economic Development," World Development, Elsevier, vol. 78(C), pages 172-187.
    3. Muchapondwa, Edwin & Mukanjari, Samson, 2014. "Understanding Chinese and Western development finance in Uganda, South Africa, and Zimbabwe," WIDER Working Paper Series 087, World Institute for Development Economic Research (UNU-WIDER).

    More about this item

    Keywords

    foreign aid; charitable giving; discrete choice experiment; conjoint analysis; PAPRIKA method;

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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